J.C. Penney Co. Inc.’s stock is testing lows it hasn’t seen since 2000 as the company continues its search, not just for an operational turn around, but financial stability.

The stock fell as much as 16.6 percent to $9.93 in morning trading today — a level not seen since October 2000, when the market was still reeling after the dot-com bubble burst. As of 11:50 am on Wall Street, the stock was down 11.60 percent to $10.52, giving it a market capitalization of $2.32 billion. Nearly 61 million shares had traded hands, well ahead of the 18.8 million daily average for the last three months.

Myron “Mike” Ullman 3rd, chief executive officer, has been working to turn the company around in the wake of former ceo Ron Johnson’s star-crossed effort to remake the chain and eliminate price promotions.


But recent research from Goldman Sachs underscored just how steep a hill Ullman has to climb.

Goldman debt analysts Kristen McDuffy and Ryan Gallant initiated coverage on Penney’s Tuesday with an underperform rating and argued that “a combination of weak fundamentals, inventory rebuilding and an underperforming home department will likely challenge J.C. Penney’s liquidity levels in [the third quarter].”

Penney’s has been said to be looking to raise funds and the analysts noted that the company does have options.

McDuffy and Gallant said the company could sell “fringe land” for $100 million, its tire, battery and automotive locations for up to $135 million and its regional mall partnership units for as much as $150 million. Additionally, the company said it could take on $500 million in debt.

More complicated options include, monetizing under-market value leases for about $400 million or raising up to $1 billion in new equity.

Although the Goldman analysts said it was too early to be “handicapping a bankruptcy filing,” they did run the numbers and estimated that unsecured creditors would receive as much as 65 cents on the dollar if the company filed as a going concern with no debtor in possession financing. Under a more dire liquidation scenario, the analysts said unsecured creditors would receive only 13 cents on the dollar.